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11 May 2023

Article: Why are some CIOs still resisting to cloud computing?

Article by Fabrício Oliveira, CEO of Vockan Consulting*

Being a leader means making decisions all the time. Some easier and more objective, others more complex and with the power to generate a direct impact on business. When we talk about digital transformation, there is not always just one right answer. However, there are technologies that are gaining market share and expanding their penetration, positioning themselves – often – as obvious choices. This is the case of cloud computing.

In recent years, this technology has advanced and conquered the market exponentially, according to research carried out by Gartner. For the institution’s senior director, Henrique Cecci, “there is no business strategy without a cloud computing strategy”. Part of this success is due to the fact that this type of solution offers faster updates, handles a large amount of data processing and takes the worry out of companies to maintain a robust server.

By focusing on the Enterprise Resource Planning (ERP) market, we have an enormous amount of data generated by production lines that cannot stop. It is a very high volume of processing and any dissonance can lead to great real financial losses. However, there are still CIOs who resist to cloud computing and prefer the on-premise solution, that is, they choose to keep a server inside the company. Why? Some aspects may be important components of this response:

Perception of cost

Many leaders still do not have a holistic view of the costs of their operations. It is common that only direct financial costs are considered. Thus, when doing the basic investment calculation for hiring a cloud solution, whose licenses and permissions are often practiced in dollars, it may seem that it is economically worthwhile to keep a server within the company. According to Gartner, the cost of the cloud in Brazil is 78% higher than in the United States, for example.

However, what is not being seen are the indirect and, especially, the invisible costs – what is the cost of the space used by your server, how much do you pay for the guarantees, both for the servers and for the software and technical consultations, for example? It’s called Total Cost Ownership – or Total Cost of Ownership.

Security and Reliability

It is natural that there is an inclination to trust more in what we can see and touch. Having a room full of processors consuming electricity, with professionals able to check that everything is operating correctly, may seem like the safest solution. But cloud computing offers several levels of security and visibility into each user’s steps. Unlike the information residing in a machine, it makes up a complex and agile network to identify usability pattern breaks.

In terms of security, we have seen news about ransomware attacks with some frequency – when company data is kidnapped and fortunes are demanded as a ransom. The impacts can be even worse when operations have to be stopped, affecting not only revenue but also the reputation of companies. In this sense, cloud ERP tends to be more secure. However, I always say that the CIO should be concerned with the structure being proposed, ensuring that the supplier guarantees – in addition to the security certifications of the environment in which the system runs – also that all personnel who have access to the environment be certified, regardless of where it happens.

Tradition

Do you know the old maxim “If it ain’t broke, don’t fix it”? So a lot of people still think like that. “If we’ve been doing well so far, why should we adopt another type of solution?”, the resisters might say. Cloud computing has been on the market long enough to no longer be an innovation. It is an experimented and democratized technology.

According to Gartner, Brazil faces some particular challenges in the implementation of cloud solutions, such as regulatory issues for some sectors and the concentration of technology in large centers such as São Paulo and Rio de Janeiro. Despite this, companies that want to grow need to think about the scalability of their systems. If you need to process 20% more data tomorrow, what will that look like? An increase in the volume of processing also requires greater capacity for interpreting information, whether on the part of the servers themselves, a team of professionals or artificial intelligence.

Our world is so fast-paced that there are those who say that in two years technologies can already be declared obsolete, as there is something new and innovative being launched to replace them. 5G promises to definitely impact the data center market. This constant movement shows us that those who are not prepared to take the next steps can lose competitive advantage and increase the valley that separates companies that are already in full swing with digital transformation.

*Article originally published on Computer Weekly (Brazil).

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